South Korea's economy, rated moderately free through most of the history of the Index, has advanced to mostly free in the past eight years. A dynamic private sector with a well-educated labor force and high capacity for innovation has capitalized on openness to global trade and investment.

1. South Korea

2. OUTLINE
KEY DISCUSSION
POINTS
•
•
•
•
•
•
•
•
•
•
•
•

3. ABOUT THE
COUNTRY
SAFE TO VISIT

4. WHAT SETS
ECONOMY TOGETHER?
INNOVATION AND TECHNOLOGY
•
•
• The economy is dominated by its services and
industrial sectors.
•

5. CORE INDUSTRIES
WHAT, AIM TO BE
•
•

6. SECTOR-WISE
DISTRIBUTION
KEY INSIGHTS
•
•
•

7. •
•
•
AGRICULTURAL
SECTOR

8. •
•
•
INDUSTRIAL
SECTOR

9. •
•
•
SERVICE
SECTOR

10. LITERACY RATE
STATISTICS
OF THE
COUNTRY
582.5
97.90%
DEATH RATE
POPULATION
(2017)
EMPLOYMENT RATE
BY SECTOR
NOTE: DATA DO NOT include any impacts of the COVID-19 virus.

11. •
CRITICAL POINTS

12. •
•

13. URBANIZATION
Urbanization in Korea was outcome of
economic modernization
•
•
•

14. MOVEMENT OF GOVERNMENT OVER MARKETS
South Korea’s government support has made the country
one of the most active markets.

15. South Korea's economic freedom score is 74.0
Economic Freedom Status
MOSTLY FREE
• Its overall score has increased by 1.7
points due to higher scores in the rule-
of-law pillar.
• The Personal Income Tax Rate in South
Korea stands at 42 percent.
• Korea's tax-to-GDP ratio was 26.9% in
2017, below the OECD average (34.2%)
by 7.3 percentage points, and above
the LAC and Africa (21)* averages
(22.8% and 18.2%, respectively)

16. China
United States
Vietnam
Hong Kong
China
United States
Japan
Saudi Arabia
Electrical, electronic
equipment
Machinery, nuclear
reactors, boilers
Vehicles other than
railway, tramway
$
Mineral fuels, oils,
distillation products
$
Mineral fuels, oils,
distillation products
Electrical, electronic
equipment
Machinery, nuclear
reactors, boilers
Optical, photo, technical,
medical apparatus

17. •
• 5th
9th
•
83%

18. CAPITAL/LABOUR
INTENSIVE
INFLATION RATEUNEMPLOYMENT RATE
LEVEL OF POVERTY

19. Exchange Rate

20. Monetary Regime
Four government entities are in charge of foreign exchange activities in South Korea
Ministry of Finance and Economy (MOFE), Bank of Korea (BOK), Financial
Supervisory Service (FSS), Korea Customs Service (KSS).
The ministry sets the overall foreign exchange policy, and the Bank of Korea holds
and manages the foreign reserves, while managing all transactions pertaining to
foreign trade and capital movements.
It also supervises money-changers and foreign-exchange brokers, and provides
foreign-exchange banks with foreign currency loans.
Apart from these government regulatory and supervisory institutions, banks involved
in foreign exchange have the authority to engage in such financial transactions,
including international banking.

21. South Korea
C
CREDIT MARKET
• Standard & Poor's credit rating for South Korea
stands at AA with stable outlook.
• Moody's credit rating for South Korea was last set
at Aa2 with stable outlook.
• Fitch's credit rating for South Korea was last
reported at AA- with stable outlook.
• In general, a credit rating is used by sovereign
wealth funds, pension funds and other investors.
CREDIT RATING- High grade

22. THE WAY BANKS WORK

23. Structure andAssets Management
• South Korea's Non Performing Loans Ratio stood at 0.6 % in Mar 2020,
compared with the ratio of 0.6 % in the previous quarter.
• South Korea's Non Performing Loans Ratio data is updated quarterly,
available from Jun 2001 to Mar 2020. The data reached an all-time high of
3.5 % in Jun 2001 and a record low of 0.6 % in Mar 2020.
• Financial Supervisory Service provides quarterly Non Performing Loans
Ratio. Non Performing Loans are defined as summation of Loans overdue
for more than 3 months with Non Accrual Loans.
[COVID-19-IMPACT]

24. Stability
• Currently, the BOK said the country's financial system is in a better position than it
was two months earlier, shortly after the new coronavirus outbreak here peaked at
around 900 new cases per day in late February and early March.
• The country's financial stability index shot up to 22.3 in April, breaching the lower
boundary for a crisis warning, but it has since come down to 18.
• As of end-March, outstanding debt of South Korean households reached 1,611.3
trillion won ($1.33 trillion), up 4.6 percent from a year earlier that marked a slight
acceleration from the previous quarter.
[COVID-19-IMPACT]

25. Government Budget
• South Korea recorded a Government
Budget deficit equal to 2.60 % of the
country's Gross Domestic Product in
2019.
• South Korea's fiscal deficit in the first five
months stretched to 78 trillion won ($65
billion), more than doubled from a year
ago due to record spending and reduced
tax income amid the worst
pandemic in modern history.

26. • Government Debt to GDP in South Korea is
expected to reach 40% by the end of 2020.
(Trading Economics global macro models
and analysts expectations)
• South Korea increased to 485,814.70 USD M
in the first quarter of 2020 from 466,978.70
USD M in the fourth quarter of 2019.
External Debt
*External debt is a part of the total debt that is
owed to creditors outside the country.

27. WORDS OF INSPIRATION
If America would withdraw from South Korea,
there could be a power struggle between
China and Japan.

28. 감사합니다